Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of the National Insurance Contributions (Employer Pensions Contributions) Bill on pension saving behaviour in the private sector; and whether they expect the measures to have a disproportionate effect compared to the public sector.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The OBR set out in their Economic and Fiscal Outlook that they do not expect a material impact on savings behaviour as a result of Budget 2025 tax changes.

This change applies to all employers who use salary sacrifice for pensions, regardless of whether they are public sector or private sector. Many public sector employers are already prohibited from using salary sacrifice for pensions under government rules of "managing Public Money".

Saving into a pension, including through salary sacrifice, remains highly tax advantageous. The Government continues to provide over £70bn of income tax and NICs relief on pension contributions each year.

A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to pensions salary sacrifice and is available online at: https://www.gov.uk/government/publications/salary-sacrifice-reform-for-pension-contributions-effective-from-6-april-2029

Found: National Insurance Contributions (Employer Pensions Contributions) Bill: HL Bill 164 of 2024–26

Found: National Insurance Contributions (Employer Pensions Contributions) Bill

Found: thresholds from April 2028 to April 2031; • the impact of the National Insurance Contributions (Employer Pensions Contributions) Bill